6 Questions You Need To Ask Yourself Before Upgrading To A Private Property - DollarsAndSense

If you’re upgrading to a private property for the first time, here are some factors you need to consider first.

This article was written in collaboration with CIMB Bank. Views expressed in the article are the independent opinion of DollarsAndSense.sg. Product features are accurate at time of writing and are subject to change in future. Please refer to CIMB Bank’s website for the latest rates and promotions.

Upgrading to a private property is a dream for many people living in Singapore. Here are 6 considerations you should use to assess whether you’re ready to take this next step.

#1 Are You Eligible To Upgrade To A Private Property?

If you’re staying in a HDB flat, you’ll need to ensure you have fulfilled the Minimum Occupancy Period (MOP) of 5 years before you can i) Sell the flat in the open market; ii) Rent out the whole flat; iii) Invest in private property.

In addition, you also need to ensure that your flat sale is within the Ethnic Integration Policy (EIP) and Singapore Permanent Resident (SPR) quota.

The EIP ensures a balanced ethnic mix in HDB estates, while the SPR quota ensures that SPR families can better integrate into the local community. You will not be able to sell a particular flat if the sale causes your block or neighbourhood’s EIP or SPR quota to exceed.

Read Also: Complete Guide To Upgrading From Your HDB Flat To A Private Condominium In Singapore

#2 Have You Cleared Your Existing Mortgage?

When you sell your HDB flat, you have to use the sale proceeds to pay off your outstanding housing loan first. You also have to refund any amount (plus accrued interest) which you have borrowed from your CPF Ordinary Account. These include the downpayment, monthly loan repayment and any HDB housing grant that you may have taken.

After paying off any outstanding housing loan and the amount which needs to be returned to your CPF, you will receive the remaining amount in cash.

#3 Will You Be Taking Up A New Home Loan?

For many Singaporeans, you would need to take up a bank loan in order to purchase your private property. If this is your first property, you can borrow up to 75% of the property value or selling price, whichever is lower.

For example, CIMB’s Private Home Loan offers:

Low Interest Rates: Opt for either a Fixed Rate or Singapore Interbank Offer Rate (SIBOR) package.

High Margin of Financing: With up to 75% Loan -To-Value (LTV) on CIMB Private Property Loans, you get to keep your initial outlays at a minimum.

Flexible Loan Tenures: Everyone has different financial needs. CIMB Private Home Loans offer tenures of up to 35 years (or 70 years of age, whichever is earlier).

#4 Have You Calculated Your Total Debt Servicing Ratio (TDSR)?

The Total Debt Servicing Ratio (TDSR) is the maximum percentage of one’s monthly income that can be used to service all your loan obligations. This includes credit card debt, student loans, car loans, and existing mortgages.

Here’s how the TDSR is calculated:

(Borrower’s total monthly debt obligations / Borrower’s gross monthly income) x 100%

Currently, the TDSR limit is 60% of one’s gross monthly income. For example, if your monthly income is $4,000, the maximum amount that can be used to service your loans is $2,400.

Read Also: Understanding Total Debt Servicing Ratio (TDSR) – And How It Affects Your Personal Finance Decisions

#5 How Much In Additional Buyer’s Stamp Duty (ABSD) Do You Need To Pay?

There is no Additional Buyer’s Stamp Duty (ABSD) imposed on the purchase of your first property. However, when you upgrade by purchasing your private property, you will have to pay ABSD as this will be your second property.

Citizens and permanent residents (PRs) buying second property are required to pay stamp duty of 12% if this private property is your second home and 15% if this is your third or more residential property.

#6 Do You Require Short-Term Financing Support?

Between the time you purchase your private property and sell your HDB, there could be a difference of a few months.

During these few months, you may be waiting for the sales proceeds from your HDB flat to come in, while servicing the loan for your private property.

If you are tight on cash, you might need to consider short-term financing options such as a bridging loan.

CIMB Beautiful Sunday

From now till 30th November, homeowners can enjoy 52 Interest-free Sundays on their Mortgage when they take up a loan with CIMB Bank with interest is as low as 1.84% per annum, subject to terms and conditions.

For more information, visit CIMB Bank’s website today.

To recap the pointers in this article, you can refer to this infographic created by DollarsAndSense:

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• November 1, 2019
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Source: DollarsAndSense

Resale Flat Transactions Jumped 18 Per Cent in October 2019 - 99.co

Resale flat transaction volumes rose last month, following a relaxed income ceiling and higher grants. Prices are still mostly flat, however, and that’s unlikely to change anytime soon:

How many more flats were sold?

2,213 resale flats were sold in October, up from around 1,814 the month before. This is an increase of about 18 per cent month-on-month, and an increase of 10.6 per cent from October 2018.

Most of the units sold were four-room flats, accounting for around 41 per cent of total transactions. Four-room and three-room flats each made up about a quarter of total sales, with the rest being executive, 3G, and two-room flexi-flats.

However, resale flat prices are still in the doldrums

Resale flat prices dipped a further 0.2 per cent in October. The downward trend in resale flat prices has now lasted for about five years; across Singapore, resale flat prices are down about 2.7 per cent compared to 2014:

However, the decline in resale flat prices shows signs of slowing. According to The Business Times, younger flats (less than years old) saw a quarterly price decline of 2.5 per cent, as opposed to 4.8 per cent in the same time last year. Likewise, older flats (40 years and above) saw prices fall just 0.9 per cent in Q3 2019, from a much sharper 3.4 per cent dip in the same time last year.

Why is the volume of transactions rising?

One reason could be a recent tweak to HDB rules. Under the Enhanced Housing Grant (EHG), buyers can receive grants of up to $80,000 for both new and resale flats. Also, the income ceiling for HDB flats has been raised to $14,000, up from $12,000 previously.

Another reason is the large number of flats reaching their MOP this year. There’s increased availability of flats, including in desirable mature estates. Coupled with lower prices, this could prompt some buyers to consider resale instead of alternatives like BTO flats in less mature areas, or smaller condo units.

While sales volumes are likely to increase, prices are likely to stay flat

Good news for buyers: with a large number of flats reaching MOP, prices aren’t likely to rise anytime soon

From our perspective, resale flat prices have little room to rise in 2019, or even in 2020. This can be chalked up to two main factors:

The first is the large amount of supply, from the sheer number of units reaching their MOP. Some 50,000 flats are expected to reach MOP in 2020 to 2021. With so many upgraders hoping to sell and upgrade, buyers have the clear upper hand.

The second reason is the emotional: HDB flats have gradually been re-positioned, from surefire investments to just “a roof over your head”. The renewed emphasis – particularly with growing worries of lease decay – has provided Singaporeans with a reality check. While we still see the occasional million-dollar flat, the days of sky high Cash Over Valuation (COV) are mostly at an end, barring significant shifts in government policy.

Does that mean now is a good time to buy a resale flat?

Resale flats have been affordable for a long time now – buyers today are no longer subject to high COV, which was practically a norm in the property heydays of 2009 to 2013.

Some buyers, being aware of the supply situation, may be thinking of waiting even longer – till about 2020 or 2021 for reasons mentioned above. However, remember that by then the location you want may no longer be available; nor is there a guarantee that the specific neighbourhood you’re after may see significant price drops.

Home buyers should stay focused on affordability, rather than trying to time the market. For those who buy today, it could be argued you’re already getting a better deal, compared to many buyers from the previous decade.

Are you eager to buy a resale flat anytime soon? Voice your thoughts in our comments section or on our Facebook community page.

Looking for a property? Find the home of your dreams today on Singapore’s largest property portal 99.co! You can also access a wide range of tools to calculate your down payments and loan repayments, to make an informed purchase.

3 days ago · 4 min read · by Ryan Ong

Source: 99.co (11 Nov 2019)

More HDB resale flats sold in Oct after policy changes kick in - SRX

In all, 2,213 HDB resale flats changed hands, up 18 per cent from September, says real estate portal SRX Property. Compared with a year ago, the resale volume was 10.6 per cent higher. 

BT FILE PHOTO

MORE Housing and Development Board (HDB) resale flats were sold last month compared with previous months after higher grants and income ceilings for first-time buyers took effect in September.

In all, 2,213 HDB resale flats changed hands, an 18 per cent increase from September, real estate portal SRX Property said on Thursday. Compared with a year ago, the resale volume was 10.6 per cent higher.

Four-room flats made up 40.8 per cent of the units sold last month. Five-room flats were 24.3 per cent; three-room flats 25.4 per cent; and executive flats 7.5 per cent. The rest were multi-generation and two-room flats.

Analysts say the policy changes last month could have had an impact on the resale market.

In September, the government announced a new Enhanced CPF Housing Grant (EHG) of up to S$80,000 available to eligible first-time flat buyers, regardless of whether they get a new or resale flat. There are also no restrictions on their choice of flat type and location.

ERA Realty head of research and consultancy Nicholas Mak said: "Home buyers are probably capitalising on the (EHG) grant, as transaction volume increased in October.

This figure is the highest since July last year, almost 21 per cent more than the 12-month average."

Christine Sun, head of research and consultancy at OrangeTee, said: "Demand for HDB resale flats has continued to strengthen after a number of new policies have been introduced progressively in recent months."

Resale flat prices in October dipped by 0.2 per cent over September's figures, although this was still 0.1 per cent higher than a year ago.

Compared with their peak in April 2013, October resale prices were 14.3 per cent lower. Prices in non-mature estates rose by 1.1 per cent year on year while those in mature estates fell 1.3 per cent.

The most expensive resale flat last month was a five-roomer at The Pinnacle@Duxton, which went for S$1.1 million. An executive maisonette unit in Hougang was sold at S$850,000, the highest price in a non-mature estate.

SRX calculations showed that resale flat buyers in October paid what it estimates to be the market value for flats, neither over- nor underpaying.

The data showed that the overall median transaction over X-value (TOX) was zero last month.

TOX measures how much a buyer is overpaying (positive value) or underpaying (negative value) for a property based on SRX's computer-generated market value. The data only includes districts with more than 10 resale transactions.

HDB executive and five-room flats recorded positive median TOX values of S$6,000 and S$2,000 last month, while three-room and four-room flats both recorded a negative median TOX value of S$1,000.

Flats in Serangoon recorded the highest median TOX at positive S$9,500, while those in Queenstown recorded the lowest median TOX, at negative S$12,000.

ERA's Mr Mak expects the resale volume in the next month to remain high, with home buyers continuing to make use of various government housing grants.

OrangeTee's Ms Sun said that prices should remain stable despite the increased demand: "More flats will be reaching their five-year minimum occupation period and HDB is likely to increase the supply of flats in 2020. The increasing supply of flats is likely to keep prices in check in the coming months."

SRX forecasts that in the next three months, 2,320 flats will be put on the resale market as they approach their five-year minimum occupation period.

Source: The Business Times

Source: SRX (08 Nov 2019)

Real Estate Experts Share How They Plan Their Property Purchases - 99.co

Property enthusiasts of all ages gathered for the second edition of Haus it Going

Even if you are not a newbie to the property scene, the number of jargons and schemes to keep up with can be pretty overwhelming. It is why we rely on experts, and property sites like 99.co (woohoo!), to keep us in the loop.

For a round-up of what’s what in this year’s property scene, we consulted three experts. Dr Lee Nai Jia of Knight Frank Singapore shared his company’s property findings, Ryan Teow of OCBC Bank introduced the basics of property financing, and Quck Zhong Yi of Asolidplan shared innovative ways to turn properties into homes. The panel attended the second edition of Haus it Going, a 99.co property seminar and flagship event.

Here is what we’ve learnt about property investing.

Locations that should be on your watchlist

Dr Lee  highlighted that significant interest was shown to several districts over the course of 2018 and 2019. They are:

• District 19 – Hougang, Sengkang, Punggol
• District 18 – Tampines, Pasir Ris
• District 5 – Clementi, Pasir Panjang, West Coast, Dover, Buona Vista
• District 3 – Alexandra, Commonwealth

We have new launches and more to thank for these. They include the Piermont Grand condominium and Punggol Digital District (PDD) in District 19, the Treasure at Tampines project — which has over 2,000 units — in District 18, and the Parc Clematis project in District 5. Built-to-Order (BTO) launches will also affect the number of activities in certain areas.

A full-house event at WeWork Funan

Singapore property and how it’s affected by the trade war

Singapore’s real estate scene might just benefit from the trade war. Often seen as a safe haven for property, many foreign investors are flocking to our little red dot.

“As we are still unsure of [the trade war’s] conclusion, it is best [for investors] to look at safe assets like gold and bonds. While real estate hasn’t picked up, it is stable,” says Dr Lee.

But where are these foreign investors from exactly? According to research by Knight Frank, common countries include India, Indonesia, and Malaysia. There is a sliver of “unspecified foreign buyers”*, too. Anecdotal evidence suggests most foreign buyers are from China.

Regardless of nationality, it seems that foreign buyers are mostly interested in District 9 and 10 properties. The Knight Frank research reports that in the first to third quarter of 2019, 121 units in District 10 were purchased by foreign buyers. One reason for this, according to Dr Lee, is that most foreign buyers are not as knowledgeable about other local neighbourhoods.

*To form quarterly property market reports, the Urban Redevelopment Authority extracts information from two places: caveats lodged and developers’ survey. While caveats are informative, surveys do not state the ethnicities or nationalities of interested investors.

Want to add value? Spruce up your home 

Interior design adds value to a home, especially older properties. “When you buy an older flat for returns, you need to add value to the apartment. You can do that through interior design. When the interior design is good, people tend to overpay,” says Dr Lee. Some things you can do to improve your home design, according to architect Quck Zhong Yi, include:

• • Maximising the view you have. It can make a great first impression for guests and potential buyers in the future.
  • Creating dialogue between spaces: “For one of our homes, we created a seamless and open space from living room to kitchen. There are pockets of windows between the spaces so homeowners remain connected, too,” says Zhong Yi.
  • Ensuring enough storage: On the other hand, having lots of built-in storage can help you reduce clutter around the house. Take stock of what you have and allocate a space for it. Lining your storage across a wall, or replacing walls with storage, achieves a cleaner look.

A fresh take on a HDB maisonette by Asolidplan

Are old properties really that jialat? 

People rarely see old properties as a money-making asset. But is it all that bad? Dr Lee offered a different perspective — especially for those planning to keep a condominium beyond a 20-30 year investment horizon.

He says, “Some say that if you want to hold to a condominium that long, you might as well get a freehold; this is because prices have been proven to drop exponentially after the 60-year point. However, freehold prices might drop, too, as there is the matter of physical obsolescence. When you keep a condominium for that long, you are seeking one thing and one thing only: en-bloc.”

En-bloc is truly the best case scenario, as finding a buyer for old flats might prove to be tricky.

“Do take note that banks consider the remaining lease of a property [before deciding on a loan amount]. If you were to buy a 50-year remaining lease property and you want to sell it 10 years later (at a 40-year remaining lease), the loan amount that your prospective buyer will receive is reduced. This will greatly reduce the prospect [of you selling the house], unless your buyers are paying by cash,” explains Ryan.

Here’s more insight on old flats.

Know how much your property will actually cost you

Your dream condo unit might cost $700,000, but that’s not all you will be paying. Before calculating how much you should be saving or earning per month to afford it, take note of these “hidden” fees that will affect the total amount you will be paying.

Buyer Stamp Duty: This applies to all property purchases. The more expensive the property, the more you will pay. Read about buyer stamp duty rates here.

Additional Buyer Stamp Duty (ABSD): Applicable if you are buying your second or third property. Good news is, you might be eligible for a remission. 

Legal fees: Hey, someone needs to sort out the paperwork and legal checks for you. 

Valuation fees: To know how much a property is worth, it has to undergo a valuation.

Mortgage Rates: There are three types of mortgage rates, each differentiated by who determines them. They are SIBOR and Fixed Rate — we talked about them here — as well as Board Rate, which means the bank determines your interest rate based on internal requirements.

Sales Agent Fee: Common commission rates for HDBs are 1% from buyer and 2% from seller, whereas it is 2% for sellers of private properties.

Property Tax: This is based on a tax rate on the Net Annual Value of your property.

Maintenance fees: These are the Monthly Service & Conservancy Charges for HDBs and services fees for private condominiums. More on how these are priced here.

Will the total cost of your property purchase impede your decision to buy a private property?

When investing, consider these important questions

Dr Lee advises that when hunting for properties with investment potential, consider not only prices but mega trends as well. Answer these questions:

• • When your kids grow up, what type of homes would they [and their age group] want to live in? Due to globalisation and more people travelling for work, Dr Lee suggests that the future might be in renting rather than owning a property. Future property owners will also look out for greener and more sustainable spaces, due to the global awareness on climate change.
  • When you are old, what kind of area would you like to live or retire in? Consider car-lite areas like Tengah, as you are less likely to drive or have a car the older you get; Places with more leisure areas like Waterway at Punggol are ideal for family activities; and Tanglin, where you do not have to travel far for hospitals, food, and shopping.
  • “Base your investing steps on these two scenarios, and you won’t fail,” he says.

Have a topic you want covered? Share it here and we’ll try and cover it at the next Haus it Going event!

This event was sponsored by Affinity at Serangoon and Riverfront Residences — both Oxley Holdings’ properties. Read more about our panel of speakers, as well as moderator, on the Haus it Going site.

2 days ago · 7 min read · by Eliza Hamizah

Source: 99.co

5 Affordable Condo Rentals In Punggol - 99.co

Picture Source: 99.co

First, there was Waterway Point. Then, several container cafes sprung up at Punggol East. Now, residents in Punggol are eagerly awaiting the launch of Punggol Town Hub. Amongst other things, this will house a new hawker centre, public library, and childcare centre.

With so many amenities and food options, there’s no doubt that Punggol is fast becoming a highly desirable neighbourhood. In this blog post, we share five affordable condo rentals in Punggol for those who are thinking of moving to the North-east.  

PS: If you’re torn between buying a new apartment and getting a rental unit, take a look at Piermont Grand, a new EC that’s located in Punggol. 

#1: Watertown

District: D19

Nearest MRT: Punggol

Size: 560 sq ft (one bed, one bath)

Rent price: $2,200

PSF rent price: $3.93

Watertown sits atop Waterway Point, and it’s billed as Punggol’s first integrated waterfront development. Staying here gives you all the convenience in the world – if you’re feeling peckish, you can pop down to any of the restaurants, eateries or cafes at the mall to have a bite, and for those who commute via public transport, Punggol MRT and bus interchange are just a few steps away.

This one-bedroom apartment at Watertown is going at $2,200 per month. 

#2: (Also) Watertown

District: D19

Nearest MRT: Punggol

Size: 1,195 sq ft (three beds, three baths)

Rent price: $3,900

PSF rent price: $3.26

Want to stay at Watertown, but need more space? This three-bedroom apartment is pretty sizeable, and can accommodate a bigger family. Amenities in the condo include four different pools, a lounge cabana, open deck, lily pond, water dining pavilion and outdoor fitness zone.

#3: Parc Centros

District: D19

Nearest MRT: Punggol

Size: 764 sq ft (two beds, two baths)

Rent price: $2,350

PSF rent price: $3.08

Parc Centros is a 99 year leasehold condominium that’s located just three minutes away from Punggol MRT. The development was completed just recently in 2016, so its facilities (including an infinity pool, swim out bar and spa pods) are still new and well-maintained. This two-bedroom unit is located on a high floor and comes with a pool view.

#4: Twin Waterfalls

District: D19

Nearest MRT: Punggol

Size: 322 sq ft (studio apartment)

Rent price: $1,700

PSF rent price: $5.28

Twin Waterfalls is further from Waterway Point and Punggol MRT than the other condos in this list, but it’s still a manageable 10-minute walk away. If you drive (or cab around a lot), you’ll appreciate that the condo is located at the highway exits, giving you easy access to the rest of Singapore. Check out this studio apartment, which is priced at $1,700 per month.

#5: A Treasure Trove

District: D19

Nearest MRT: Punggol

Size: 775 sq ft (two beds, two baths)

Rent price: $2,450

PSF rent price: $3.16

Last but not least, we have A Treasure Trove, a 99 year leasehold condo that’s a seven-minute stroll away from Punggol MRT. There are plenty of eateries near this development, and it’s also located close to Punggol Emerald Common Green, which is a small-sized park. You can rent a two-bedroom apartment here for $2,450.

7 days ago · 3 min read · by Elizabeth Tan

Source: 99.co